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Economy
Mahesh

26/02/24 07:54 AM IST

Poverty levels below 5%, claims NITI Aayog chief

In News
  • Less than 5% of Indians are now expected to be below the poverty line, and extreme destitution has almost gone away.
Key findings
  • The urban-rural consumption divide has narrowed to 71% in 2022-23 from a peak of 91% in 2004-05, so inequality is declining,even as rural households’ spending on food has dropped below 50% of their total expenditure for the first time ever.
  • Lower spends on pulses and cereals — which dropped below 5% of per capita consumer expenditure as per the latest survey — and higher expenditures on conveyances, consumer durables, and consumer services indicates that people are earning more and need to spend a lesser share of their income on food.
  • It’s not that consumption levels of food are going down in absolute terms, but the relative spending on food is declining while consumption of products like TVs, fridges, mobile phones, and cars have increased.
  • Within food, we see the consumption of beverages, processed food, milk, and fruits is going up, an indication of more diverse and balanced food consumption.
Poverty levels
  • ₹1,373 was the average consumption level for the bottom 5% of rural households, while it was ₹1,782 for the next 5% of households.
  • Poverty lines and estimates are derived from this. We have had four, five different informal estimates for poverty in the absence of the 2017-18 Survey findings.
  • If we go by ₹32 a day, which was the last accepted poverty line as of 2011-12, and factor in inflation trends since then to double that level to about ₹60 a day, then you will see that poverty is less than 10%, as ₹1,782 is the average spending by those in the bottom 5% to 10% fractile class in rural India.
  • Moreover, benefits like healthcare under the Ayushman Bharat scheme, and free education have not been factored into the consumption expenditure survey.
  • As per the Niti Aayog’s multi-dimensional poverty index, 11% of the population was below the poverty line last year, based on which it has argued that 25 crore people have escaped poverty.
Source- The Hindu

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